Here is a comment from a trader that is trading with price movement rather than the trend.
“This really reminds me of my experience as of late. Every time the market moves against me, I wait until I just can't take any more unrealized loss, then reverse the position hoping that the momentum will help me recover some of the loss, get me to BE, or even profit. Soon after I do this, the market reverses its direction and instead of putting me back in the green, exacerbates the situation. Worse yet, I come to realize that had I kept the original position, I would not lose or even gain from it. Effectively, the initial bad decision soon snowballs into a serious loss.
This problem keeps haunting me time and time again with AU, and I just can't seem to make any money other than from pip-scalping. So, how does one go about staying positive in the face of a bad move, and how can you know for sure that the opposite of your initial conclusion is still valid and a reversal is a good idea?â€
One of the most important things this trader can do is to get in tune with what the market is doing. He needs to start looking at larger time frames and trade with good money management practices. He should start using stop loses, timing his entry by looking at the larger trend then go to a smaller time frame for the entry point.
If a trade is going against you, you need to observe the market from the perspective as if you were not in a position, even if you are. Step back and ask yourself some questions for example. Would I get in this trade in the direction it is going? If I were in this trade would I take a loss and get out of this trade? Which direction are the larger time frames telling me the market is going? Would I take a small loss now or a larger loss later? Did I have my stop loss in place when the trade was open?
When a trade goes against you and you do not have your stop loss in place that is a sign that you will let it run until you are thinking “I can’t stand it anymoreâ€. You may be over trading your account so one trade will wipe out your account. Another thing traders need to get over is to always be in a trade. Wait until the market comes to you or says here is a good trade.
Closing thought:
"Your losing trades do not diminish you as a person. You are not your losing trades. You are also not your winning trades either. They are simply by products of the business that you are inâ€.